Selecting inventory management software that aligns with your business requirements is important. But using the system to its full potential is even more significant. You should streamline business operations to get the best results. In this discussion, we will mention some practices to level up your inventory management skills. Even if you think you are doing well with inventory management, you should go through the article. Because there is always plenty of areas to improve.
Define your Inventory KPIs
Setting goals is necessary to measure your progress. It is advisable to set milestones to analyze your business performance. This practice especially helps in maximizing productivity. Define your key performance indicators (KPIs) and plan your strategies accordingly. Some of the important inventory KPIs are inventory turnover, order status and tracking, cycle time, and inventory carrying cost.
Reduce your Inventory Levels
The size of the inventory varies from business to business. A footwear retailer would have higher stock levels in his warehouse as compared to the one who provides a fresh food delivery service. However, it is always recommended to keep low stock levels. It’s better to reorder a suitable quantity from time to time than to purchase a large volume at once. Low stock levels will be easier to manage and organize. It will take up less space and you can reorder according to the demand. This will minimize the loss factor. Moreover, the cost of items in the market keeps on fluctuating. In case there is a price fall, you will have to sell your high- volume stocks at lower prices. The inventory management system provides the statistics and helps you figure out suitable inventory levels according to your business flow. Keep the data in mind and place orders accordingly.
Categorize your Inventory
To streamline your inventory, you should know every item in your stock and how well they are doing in the market. The best way to maximize inventory control is to categories your inventory. Analyze your business performance through the inventory management system and divide it into different categories; the best- selling items, medium priority stock, and the low priority stock. Keep the top-selling products, your highest priority, and ensure their availability. Medium priority items need periodic reordering while low priority stock needs minimal reordering. This division will help you increase business productivity and optimize warehouse storage space.
Implement Quality Control
Implementing quality control measures is extremely important for business growth. Your product’s quality is linked to your reputation, hence quality control should be implemented at the very start. Make a list of procedures that your team needs to follow whenever a lot arrives at the warehouse. Some of the quality control measures are checking for any signs of any damage or broken seals. Seeing if the products’ color, size, and style match the ordered specifications. Quality control steps vary from business to business. Understand your business requirements and define your quality control efforts accordingly. Moreover, quality control is not the responsibility of the warehouse management team. When every team member is working towards the same goals, the quality will increase. Therefore, make quality control everybody’s responsibility to maximize the results.
Optimize Order Handling and Reordering Process
The heart of a good inventory management system is to enhance user experience. Optimize order handling and processing. Efficient order handling will bring customers to your site. Some of the tips to optimize order handling are; organize your warehouse and remove clutter. Place your hot selling items close to the parking area to increase efficiency. Integrate a warehouse management system with your inventory management system to automate the order handling process. Use barcodes and RFIDs for accuracy. Create reordering plans to avoid low stock issues.
Conduct a Risk Assessment and Audits Regularly
Even with careful decisions, some problems pop up in regular business operations. It can be cash shortfall, warehouse management issues, inventory miscalculations, and much more. To cater to these issues, conduct risk assessment, list down your worst-case scenarios, and ways to address them. Conduct regular audits to ensure that everything’s going according to the plans. In case of any issues, take the necessary measures and keep your business performance in line with the reports.
Inventory management and control is the primary business process. The better you are at handling your inventory, the more are the chances of your business growth. Devise strategies for inventory management and streamline your business operations for the best results.
References at Leadership Newspaper.